ASSOCIATION OF NAT. ADVERTISERS, INC. v. F. T. C.

Certiorari Denied June 16, 1980. See 100 S.Ct. 3011.

Opinion for the court filed by Circuit Judge TAMM.

Concurring opinion filed by Circuit Judge LEVENTHAL.

Opinion dissenting in part and concurring in part filed by Circuit Judge MacKINNON.

TAMM, Circuit Judge:

Plaintiffs, appellees here, brought an action in the United States District Court for the District of Columbia to prohibit Michael Pertschuk, Chairman of the Federal Trade Commission (Commission), from participating in a pending rulemaking proceeding concerning children's advertising. The district court, citing this court's decision in Cinderella Career & Finishing Schools, Inc. v. FTC, 138 U.S.App.D.C. 152, 425 F.2d 583 (D.C.Cir.1970), found that Chairman Pertschuk had prejudged issues involved in the rulemaking and ordered him disqualified. We hold that the Cinderella standard is not applicable to the Commission's rulemaking proceeding. An agency member may be disqualified from such a proceeding only when there is a clear and convincing showing that he has an unalterably closed mind on matters critical to the disposition of the rulemaking. Because we find that the appellees have failed to demonstrate the requisite prejudgment, the order of the district court is reversed.

I

On April 27, 1978, the Commission issued a Notice of Proposed Rulemaking that suggested restrictions regarding television advertising directed toward children.1 The decision to commence rulemaking under section 18 of the Federal Trade Commission (FTC) Act2 was accompanied by a statement setting forth "with particularity the reason for the proposed rule."3 The Commission explained that it had decided to propose a rule limiting children's advertising after consideration of a staff report that discussed

43 Fed.Reg. 17,967, 17,969 (1978) (footnotes omitted).4 The Commission invited interested persons to comment upon any issue raised by the staff proposal.5

On May 8, 1978, the Association of National Advertisers, Inc. (ANA), the American Association of Advertising Agencies (AAAA), the American Advertising Federation (AAF), and the Toy Manufacturers of America, Inc. (TMA) petitioned Chairman Pertschuk to recuse himself from participation in the children's advertising inquiry. The petition charged that Pertschuk had made public statements concerning regulation of children's advertising that demonstrated prejudgment of specific factual issues sufficient to preclude his ability to serve as an impartial arbiter. See Appendix (A.) at 11, 15. The charges were based on a speech Pertschuk delivered to the Action for Children's Television (ACT) Research Conference in November 1977, on several newspaper and magazine articles quoting Chairman Pertschuk's views on children's television, on the transcript of a televised interview, and on a press release issued by the Commission during the summer of 1977.6

On July 13, 1978, Chairman Pertschuk declined to recuse himself from the proceeding. Pertschuk stated his belief that the disqualification standard appropriate for administrative adjudications did not apply to administrative rulemaking, id. at 57-58, and that, even if adjudicative criteria were relevant, his remarks did not warrant disqualification because they did not concern the petitioners in particular; rather, they addressed the "issue of advertising to children and the policy questions raised by it," id. at 64 (emphasis in original). Five days later, the Commission, without Pertschuk participating, also determined that Pertschuk need not be disqualified. Id. at 65.

In August 1978, ANA, AAAA, AAF, and TMA petitioned the district court to declare that Chairman Pertschuk should be disqualified from participating in the children's television proceeding. ANA, AAAA, AAF, and TMA also sought preliminary and permanent injunctions barring Pertschuk's participation and an order requiring the remaining Commissioners to reconsider all matters previously decided in the inquiry. The plaintiffs introduced copies of three letters, sent by Chairman Pertschuk on the day after he delivered the ACT speech, as additional evidence of his alleged prejudgment. The letters accompanied a copy of the speech.

On September 8, 1978, the Kellogg Company (Kellogg), a food manufacturer that advertises on television programs regularly viewed by children, moved to intervene as a plaintiff. The district court granted the motion on October 4, 1978. Two days later, Kellogg introduced as evidence in support of the motion for a preliminary injunction a copy of a letter sent by Chairman Pertschuk on November 17, 1977, to Donald Kennedy, Commissioner of the Food and Drug Administration.

On November 3, 1978, the district court ruled on cross-motions for summary judgment. The court, relying on Cinderella, found that Chairman Pertschuk "has prejudged and has given the appearance of having prejudged issues of fact involved in a fair determination of the Children's Advertising rulemaking proceeding." Accordingly, the court granted the plaintiffs' motion for summary judgment and ordered Pertschuk enjoined from further participation. Id. at 110. This appeal followed.7

II

Before we consider the merits of the district court's decision, we pause at a procedural way station. The Commission asserts that the district court erred in considering the disqualification issue before the rulemaking proceeding had ended. As a general matter, of course, the exhaustion doctrine provides that challenges to agency action should not be heard until relevant administrative proceedings have been concluded. McKart v. United States, 395 U.S. 185, 194-95, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969). This permits an administrative agency to develop a factual record, to apply its expertise to that record, and to avoid piecemeal appeals. Id. at 193-94, 89 S.Ct. 1657.

Application of the exhaustion doctrine, however, is not inflexible. In rare circumstances, this court has considered extraordinary prejudgment claims prior to final agency action. See Amos Treat & Co. v. SEC, 113 U.S.App.D.C. 100, 306 F.2d 260 (D.C.Cir.1962). See also Fitzgerald v. Hampton, 152 U.S.App.D.C. 1, 14, 467 F.2d 755, 768 (D.C.Cir.1972); Sterling Drug, Inc. v. FTC, 146 U.S.App.D.C. 237, 249-250, 450 F.2d 698, 710-11 (D.C.Cir.1971). The district court agreed to consider the present case prior to exhaustion of the administrative process on the basis of these decisions.

The exception to the exhaustion doctrine upon which the district court relied is extremely narrow. In SEC v. R. A. Holman F.2d 284, 286-87 (D.C.Cir.1963), for example, this court refused to review a disqualification contention when a commissioner whose impartiality was challenged denied that he had participated in earlier administrative proceedings. This court noted that resolution of the disqualification issue would necessitate prolonged evidentiary hearings and, therefore, we concluded that review of the due process claim should follow final agency action. Similarly, in Associated Press v. FCC, 145 U.S.App.D.C. 172, 183-184, 448 F.2d 1095, 1106-07 (D.C.Cir. 1971), this court refused to review, prior to final administrative action, an insubstantial disqualification claim that involved conflicting factual contentions.

Although the doctrine that permits review of a disqualification claim prior to final agency action is restrictive, the present case falls within its bounds. As the Supreme Court has emphasized, application of the exhaustion doctrine "requires an understanding of its purposes and of the particular administrative scheme involved." McKart v. United States, 395 U.S. at 193, 89 S.Ct. at 1662. For the following reasons, we find that immediate review of the prejudgment claim will not thwart the purposes of exhaustion.

First, the challenge to Chairman Pertschuk's further participation involves no disputed factual issues that demand the creation of a better administrative record. The agency has had an adequate opportunity to explain why Chairman Pertschuk need not be recused.8 Second, the issue involved in this case—the prejudgment standard required by due process for section 18 rulemaking—is a pure question of law. The Commission can bring no particular expertise to bear on its determination. Consideration of this question of first impression will not necessarily permit future piecemeal attacks on administrative processes.9 Under the particular circumstances of this case, we therefore conclude that the appellees' claim may be heard.

Judge Leventhal, in his concurring opinion, voices some concern over the jurisdiction of the district court to entertain this action. In their complaints, however, the plaintiffs alleged a violation of their procedural rights under the Constitution and the Administrative Procedure Act (APA), 5 U.S.C. §§ 551-706 (1976). Thus, the district court clearly had jurisdiction—i. e., power— to resolve the controversy under 28 U.S.C. § 1331(a) (1976) (cases arising under the Constitution and the laws of the United States) and 28 U.S.C. § 1337 (1976) (cases arising under statutes regulating commerce). See generally Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). Once a plaintiff has alleged a nonfrivolous constitutional claim, the district court has jurisdiction under section 1331, and dismissal for want of jurisdiction is improper even if dismissal for failure to state a claim upon which relief could be granted would be proper. Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 90 L.Ed. 939 (1946). See 1 Moore's Federal Practice ¶ 0.62[2.-2], at 664-65 (1977). Similarly, jurisprudential concerns, such as those embodied in the exhaustion doctrine, do not bear on whether a court has jurisdiction but only on whether it should exercise that jurisdiction.

This conclusion finds support in this court's opinion in Wolf Corp. v. SEC, 115 U.S.App.D.C. 75, 317 F.2d 139 (D.C.Cir.1963) (Burger, J.). The plaintiff in that case had asked the district court to enjoin the Securities and Exchange Commission from holding a stop-order hearing. The district court dismissed the case not for want of jurisdiction but for failure to state a claim upon which relief could be granted. Id., at 77, 317 F.2d at 141. On appeal, this court affirmed because it believed the plaintiff should have exhausted its remedies before the agency first. In the process, the court stated expressly that the plaintiff's allegation of a due process violation was sufficient to invoke the district court's jurisdiction under 28 U.S.C. § 1337. It then agreed that dismissal for failure to state a valid claim, rather than for want of jurisdiction, was appropriate. Id. Moreover, like the case before us, Wolf arose under a procedural regime that provided for review of final agency decisions in the courts of appeals, not the district courts. Compare 15 U.S.C. § 77i (1976) (review of SEC orders), cited in Wolf Corp. v. SEC, 115 U.S.App. D.C. at 77 n.6, 317 F.2d at 141 n.6, with 15 U.S.C. § 57a(e)(1)(A) (1976) (review of FTC rules). Thus, where the final agency decision may be reviewed does not by itself determine the court in which a plaintiff seeking interlocutory relief may pursue his cause of action.

III

The Commission attacks the substance of the district court's decision on two grounds. First, it insists that the standard for disqualification of an administrative decisionmaker in rulemaking differs from the standard in adjudication. The Commission's view rests on the different purposes of rulemaking and adjudication and on the longstanding rule that due process requirements are not the same in the two contexts. Second, the Commission asserts that under any disqualification standard, Chairman Pertschuk cannot be found to have prejudged issues in contravention of due process.

The appellees respond with two contentions. First, they support the district court's conclusion that Cinderella Career & Finishing Schools, Inc. v. FTC, 138 U.S.App. D.C. 152, 425 F.2d 583 (D.C.Cir. 1970), applies to Commission rulemaking under section 18 of the FTC Act. Although Cinderella involved an adjudication, the appellees claim that the existence of procedures in section 18 rulemaking proceedings that are not required in informal notice-and-comment rulemaking under section 553 of the Administrative Procedure Act, 5 U.S.C. § 553 (1976),10 mandates application of the standard set out in that case. Second, they argue that Chairman Pertschuk's statements indicate prejudgment sufficient to bar him from further participation in the children's advertising proceeding.

We are, therefore, called upon to resolve two questions: (1) What is the appropriate standard by which to decide prejudgment in the context of a section 18 proceeding? (2) Has Chairman Pertschuk made statements that demonstrate prejudgment under that standard?

A

Before we examine either the structure of section 18 or the content of Pertschuk's statements, we review our decision in Cinderella Career & Finishing Schools, Inc. v. FTC. In Cinderella, we held that the standard for disqualifying an administrator in an adjudicatory proceeding because of prejudgment is whether "`a disinterested observer may conclude that [the decisionmaker] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.'" 138 U.S.App.D.C. at 160, 425 F.2d at 591 (quoting Gilligan, Will & Co. v. SEC, 267 F.2d 461, 469 (2d Cir.), cert. denied, 361 U.S. 896, 80 S.Ct. 200, 4 L.Ed.2d 152 (1959)). See Texaco, Inc. v. FTC, 118 U.S.App.D.C. 366, 372, 336 F.2d 754, 760 (D.C.Cir.1964), vacated and remanded per curiam on other grounds, 381 U.S. 739, 85 S.Ct. 1798, 14 L.Ed.2d 714 (1965). See also Kennecott Copper Corp. v. FTC, 467 F.2d 67, 80 (10th Cir. 1972), cert. denied, 416 U.S. 909, 94 S.Ct. 1617, 40 L.Ed.2d 114 (1974). This standard guarantees that the adjudicative hearing of a person facing administrative prosecution for past behavior is before a decisionmaker who has not prejudged facts concerning the events under review.

The facts of the Cinderella case illustrate application of the standard. The Commission charged that Cinderella Career College and Finishing Schools, Inc. (Cinderella) made false representations in its advertising and engaged in deceptive practices in contravention of section 5 of the FTC Act, 15 U.S.C. § 45 (1976).11 For example, the Commission alleged that Cinderella advertised "courses of instruction which qualify students to become airline stewardesses" and that its graduates were "qualified to assume executive positions." 138 U.S.App. D.C. at 153 n.1, 425 F.2d at 584 n.1. An administrative law judge ruled that the Commission had failed to prove that the acts and practices violated the FTC Act, and he dismissed the complaint. Id. at 153 n.2, 425 F.2d at 584 n.2. Complaint counsel appealed the administrative law judge's decision to the full Commission.

While the appeal was pending before the Commission, Chairman Paul Rand Dixon spoke at the Government Relations Workshop of the National Newspaper Association and stated:

Id., at 158-159, 425 F.2d at 589-90. Six months later, the Commission, with Chairman Dixon participating, found that Cinderella neither awarded nor was capable of awarding academic degrees, and that it offered no course of instruction that would qualify students as airline stewardesses. School Services, Inc., 74 F.T.C. 920, 1022, 1031, 1035 (1968). The Commission concluded that these and other representations were false and misleading in violation of section 5 of the FTC Act and ordered Cinderella to cease and desist from such practices. Id. at 1040-42.

On review, we found that Chairman Dixon's remarks gave "the appearance that he ha[d] already prejudged the case and that the ultimate determination of the merits [would] move in predestined grooves." 138 U.S.App.D.C. at 159, 425 F.2d at 590. Accordingly, we held that Chairman Dixon's participation in the proceeding required reversal and remand of the Commission's order.

B

The district court in the case now before us held that "the standard of conduct delineated in Cinderella" governs agency decisionmakers participating in a section 18 proceeding. A. at 107. Section 18 authorizes the Commission to promulgate rules designed to "define with specificity acts or practices which are unfair or deceptive."12 Basically, it allows the Commission to enforce the broad command of section 5 of the FTC Act, which declares "unfair or deceptive acts or practices in or affecting commerce . . . unlawful."13 The district court ruled that a section 18 proceeding, notwithstanding the appellation rulemaking, "is neither wholly legislative nor wholly adjudicative." According to the district court, the "adjudicative aspects" of the proceeding render Cinderella applicable. Id. at 106.

The appellees urge us to uphold the district court's analysis of section 18. They emphasize two allegedly "adjudicatory aspects" of a section 18 proceeding: (1) interested persons are entitled to limited cross-examination of those who testify to disputed issues of material fact, see 15 U.S.C. § 57a(c)(1)(B) (1976), and (2) a reviewing court must set aside any rule not supported by substantial evidence in the rulemaking record taken as a whole, see 15 U.S.C. § 57a(e)(3)(A) (1976).14

The district court's characterization of section 18 rulemaking as a "hybrid" or quasi-adjudicative proceeding, A. at 106, ignores the clear scheme of the APA. Administrative action pursuant to the APA is either adjudication or rulemaking. The two processes differ fundamentally in purpose and focus:

Attorney General's Manual on the Administrative Procedure Act 14 (1947).15 See United States v. Florida East Coast Railway, 410 U.S. 224, 244-46, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973).

Adjudication and rulemaking may be conducted pursuant to either informal or formal procedures.16 Informal rulemaking requires the administrative agency to provide "interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments." 5 U.S.C. § 553(c). Under section 706(2)(A), reviewing courts are required to uphold informal rulemaking decisions unless those decisions are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (1976).

Formal rulemaking is invoked when "rules are required by statute to be made on the record after opportunity for an agency hearing." 5 U.S.C. § 553(c). Under sections 556 and 557 of the APA, 5 U.S.C. §§ 556-557 (1976), formal rulemaking must include a trial-type hearing at which a "party is entitled to present his case or defense or oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts." 5 U.S.C. § 556(d). Section 706(2)(E) governs judicial review of formal rulemaking and requires a court to set aside a rule that is "unsupported by substantial evidence." 5 U.S.C. § 706(2)(E).

Formal adjudication is governed by section 554 of the APA and arises in "every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing." 5 U.S.C. § 554(a) (1976). Section 554 incorporates the procedural requirements of sections 556 and 557 and affords parties to a formal adjudication the right to present evidence and to conduct cross-examination. 5 U.S.C. § 554(c)-(d). Judicial review of formal adjudication, like that of formal rulemaking, is governed by the substantial evidence standard.17

The foregoing descriptions merely outline the basic parameters of administrative action. Congress has, in the Magnuson-Moss Warranty—Federal Trade Commission Improvement (Magnuson-Moss) Act § 202(a), 15 U.S.C. § 57a (1976), and elsewhere,18 enacted specific statutory rulemaking provisions that require more procedures than those of section 553 but less than the full procedures required under sections 556 and 557.19 The presence of procedures not mandated by section 553, however, does not, as the appellees urge, convert rulemaking into quasi-adjudication. The appellees err by focusing on the details of administrative process rather than the nature of administrative action.

Our decision in Hercules, Inc. v. EPA, 194 U.S.App.D.C. 172, 598 F.2d 91 (D.C.Cir.1978), illustrates that the difference between rulemaking and adjudication is not affected by varying procedural practices. In that case, although we reviewed decisions of the Environmental Protection Agency under the substantial evidence standard, id., at 187, 598 F.2d at 106; see Environmental Defense Fund v. EPA (PCBs), 194 U.S.App.D.C. 143, 163-164, 598 F.2d 62, 82-83 (D.C.Cir.1978), we refused to find that the agency proceeding was adjudicatory. The Environmental Protection Agency was promulgating policy-based standards of general import and, thus, was engaged in rulemaking. Similarly, the Commission's children's advertising inquiry is designed to determine whether certain acts or practices will, in the future, be considered to contravene the FTC Act. The proceeding is not adjudication or quasi-adjudication. It is a clear exercise of the Commission's rulemaking authority.

C

The appellees also argue that we must apply Cinderella because it involves a factual prejudgment similar to the one now before us. In Cinderella, Chairman Dixon made statements that reflected prejudgment that Cinderella Career & Finishing Schools, Inc. had engaged in certain acts. In this case, the appellees accuse Chairman Pertschuk of prejudging issues of material fact in the children's television proceeding. We find that the appellees' argument belies a misunderstanding of the factual basis of rules.

The factual predicate of a rulemaking decision substantially differs in nature and in use from the factual predicate of an adjudicatory decision. The factual predicate of adjudication depends on ascertainment of "facts concerning the immediate parties—who did what, where, when, how, and with what motive or intent." 2 K. Davis, Administrative Law Treatise, § 15.03, at 353 (1958). By contrast, the nature of legislative fact is ordinarily general, without reference to specific parties. Adjudicative and legislative facts are also used differently:

Id.20 Thus, legislative facts are crucial to the prediction of future events and to the evaluation of certain risks, both of which are inherent in administrative policymaking.

The case law demonstrates that the factual component of generalized rulemaking cannot be severed from the pure policy aspects of the rule.21 FCC v. National Citizens Committee for Broadcasting, 436 U.S. 775, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978), is illustrative. There, the Supreme Court reviewed the Federal Communication Commission's decision to order prospective divestiture in cases of newspaper-television cross-ownership. The agency had based its decision on an assessment of the relevant market conditions. The Court, upholding the administrative action, stated that "complete factual support in the record for the [Federal Communication] Commission's judgment or prediction is not possible or required; `a forecast of the direction in which future public interest lies necessarily involves deductions based on the expert knowledge of the agency.'" Id. at 814, 98 S.Ct. at 2122 (quoting FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 29, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961)). See American Airlines, Inc. v. CAB, 123 U.S. App.D.C. 310, 359 F.2d 624 (D.C.Cir.1966) (en banc).22

Because legislative facts combine empirical observation with application of administrative expertise to reach generalized conclusions, they need not be developed through evidentiary hearings. See id., at 318-319, 359 F.2d at 632-33.23 To the contrary, however, "[w]here adjudicative, rather than legislative, facts are involved, the parties must be afforded a hearing to allow them an opportunity to meet and to present evidence." Alaska Airlines, Inc. v. CAB, 178 U.S.App.D.C. 116, 122, 545 F.2d 194, 200 (D.C.Cir.1976) (footnote omitted). This distinction has been established in judicial, as well as administrative, processes.24

Evidentiary hearings, although not necessary to determine legislative facts, nevertheless may be helpful in certain circumstances. For example, Congress, when it enacted the Magnuson-Moss Act, recognized that special circumstances might warrant the use of evidentiary proceedings in determining legislative facts. Under section 18(c)(1)(B)25 and section 18(c)(2)(B),26 the Commission must conduct a hearing, with a limited right of cross-examination, when it resolves disputed issues of material fact. The legislative history of the Magnuson-Moss Act states that "[t]he only disputed issues of material fact to be determined for resolution by the Commission are those issues characterized as issues of specific fact in contrast to legislative fact." H.R. Rep.No. 93-1606, 93d Cong., 2d Sess. 33 (1974) (Conference Report).

Although neither the Conference Report nor subsequent congressional debate amplify the term "specific fact," its genesis can be traced to a recommendation of the Administrative Conference of the United States (ACUS).27 Prior to congressional action on the Magnuson-Moss Act, ACUS promulgated Recommendation No. 72-5, which suggested that Congress should not require trial-type procedures "for making rules of general applicability, except that it may sometimes appropriately require such procedures for resolving issues of specific fact." 1 C.F.R. § 305.72-5 (1974). In a letter dated July 27, 1973, then-ACUS Chairman Antonin Scalia answered Congressman Moss's request for a definition of the term "specific fact":

A review of this and subsequent ACUS correspondence demonstrates that the term "specific fact" refers to a category of legislative fact, the resolution of which may be aided by the type of adversarial procedures inherent in an evidentiary proceeding with limited cross-examination. See Citizens for Allegan County v. FPC, 134 U.S.App.D.C. 229, 233, 414 F.2d 1125, 1129 (D.C.Cir. 1969).29 Nothing in the legislative history or background of section 18 suggests, however, that Congress believed that the use of evidentiary hearings transformed the nature of the proceedings from rulemaking to adjudication or altered the factual predicate of rulemaking from legislative to adjudicative fact. Accordingly, the appellees' contention that the Cinderella standard must be applied to section 18 rulemaking because it invokes the same type of factual judgments as Commission adjudication is simply incorrect.

D

Our conclusion that neither the procedures nor the factual predicate of section 18 rulemaking converts it into adjudication is supported by United States v. Florida East Coast Railway, 410 U.S. 224, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973). In that case, the Supreme Court held, over the protests of two dissenting Justices, that an Interstate Commerce Commission ratemaking proceeding was rulemaking. The dissent maintained that the rate order was "adjudicatory in the sense that [it] determine[d] the measure of the financial responsibility of one road for its use of the rolling stock of another road." Id. at 252, 93 S.Ct. at 824 (Douglas, J., joined by Stewart, J., dissenting). The dissent emphasized that the agency decision was based on "evidential facts," id. at 254, 93 S.Ct. at, and that it could "have devastating effects on a particular [railroad] line," id. at 256, 93 S.Ct. at 826. Nevertheless, the Court found that the proceeding was rulemaking because the agency final order was applicable to all common carriers rather than any particular railroad. The Court explained that the agency had predicated its decision on "factual inferences . . . used in the formulation of a basically legislative-type judgment, for prospective application only, rather than in adjudicating a particular set of disputed facts." Id. at 246, 93 S.Ct. at 821.

The same analysis applies to section 18 rulemaking. A section 18 proceeding is directed to all members of an affected industry and is based on legislative fact. Even when evidentiary procedures are employed in the formulation of specific fact, the product of those procedures is "used in the formulation of a basically legislative-type judgment." Id. Although we recognize that the line between rulemaking and adjudication "may not always be a bright one," id. at 245, 93 S.Ct. at 821, we have no doubt that section 18 proceedings fall clearly on the rulemaking side of the "recognized distinction in administrative law between proceedings for the purpose of promulgating policy-type rules . . . on the one hand, and proceedings designed to adjudicate disputed facts in particular cases on the other." Id. Accordingly, we now decide the standard of disqualification applicable in a section 18 rulemaking proceeding.

IV

A

Had Congress amended section 5 of the FTC Act to declare certain types of children's advertising unfair or deceptive, we would barely pause to consider a due process challenge. No court to our knowledge has imposed procedural requirements upon a legislature before it may act. Indeed, any suggestion that congressmen may not prejudge factual and policy issues is fanciful. A legislator must have the ability to exchange views with constituents and to suggest public policy that is dependent upon factual assumptions. Individual interests impinged upon by the legislative process are protected, as Justice Holmes wrote, "in the only way that they can be in a complex society, by [the individual's] power, immediate or remote, over those who make the rule." Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 445, 36 S.Ct. 141, 142, 60 L.Ed. 372 (1915).

Congress chose, however, to delegate its power to proscribe unfair or deceptive acts or practices to the Commission because "there were too many unfair practices for it to define." S.Rep.No. 597, 63d Cong., 2d Sess. 13 (1914).30 In determining the due process standards applicable in a section 18 proceeding, we are guided by its nature as rulemaking.31 When a proceeding is classified as rulemaking, due process ordinarily does not demand procedures more rigorous than those provided by Congress. See Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 524 & n. 1, 542 & n. 16, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978). Congress is under no requirement to hold an evidentiary hearing prior to its adoption of legislation, and "Congress need not make that requirement when it delegates the task to an administrative agency." Bowles v. Willingham, 321 U.S. 503, 519, 64 S.Ct. 641, 649, 88 L.Ed. 892 (1944) (citing Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372 (1915)). Accordingly, we must apply a disqualification standard that is consistent with the structure and purposes of section 18.

Congress regarded the authority to promulgate rules pursuant to section 18 as an "important power by which the Commission can fairly and efficiently pursue its important statutory mission." H.R.Rep.No. 93-1606, supra at 31.32 Through rulemaking, the Commission may allocate resources more efficiently, act with greater speed, and give specific notice to industries of the scope of section 5. See National Petroleum Refiners Association v. FTC, 157 U.S.App. D.C. 83, 101-102, 482 F.2d 672, 690-91 (D.C. Cir.1973), cert. denied, 415 U.S. 951, 94 S.Ct. 1475, 39 L.Ed.2d 567 (1974).33 More important, rulemaking allows an agency to gather information and views that might be irrelevant to the narrowly focused concerns of adjudication:

Id. at 683.

In determining the type of rulemaking procedures to be employed by the Commission, Congress sought "to avoid rigid or cumbersome procedures that could involve undue costs and delay." H.R.Rep.No.93-1606, supra at 33. To this end, Congress gave the Commission authority to limit rebuttal and cross-examination. In so acting, Congress heeded the advice of ACUS, which, when asked to comment upon the House proposal, warned that requiring "trial-type procedures . . . [in] rulemaking of general applicability [may] produce a virtual paralysis of the administrative process."34

Although Congress refused to subject section 18 proceedings to formal rulemaking requirements, it did order use of procedures not required in informal rulemaking under the APA.35 Congress intended these additional procedures "to improve the quality of information available to the Commission," H.R.Rep.No. 93-1606, supra at 33, and to compel reexamination of the proposed rule in light of the arguments adduced during the comment period. Incorporation of this information into a rulemaking record also allows a reviewing court to exercise meaningful supervision over the Commission's decision.

B

We never intended the Cinderella rule to apply to a rulemaking procedure such as the one under review. The Cinderella rule disqualifies a decisionmaker if "`a disinterested observer may conclude that [he] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.'" 138 U.S.App.D.C. at 160, 425 F.2d at 591 (quoting Gilligan, Will & Co. v. SEC, 267 F.2d at 469). As we already have noted,36 legislative facts adduced in rulemaking partake of agency expertise, prediction, and risk assessment. In Cinderella, the court was able to cleave fact from law in deciding whether Chairman Dixon had prejudged particular factual issues. In the rulemaking context, however, the factual component of the policy decision is not easily assessed in terms of an empirically verifiable condition. Rulemaking involves the kind of issues "where a month of experience will be worth a year of hearings."37 Application of Cinderella's strict law-fact dichotomy would necessarily limit the ability of administrators to discuss policy questions.

The legitimate functions of a policymaker, unlike an adjudicator, demand interchange and discussion about important issues. We must not impose judicial roles upon administrators when they perform functions very different from those of judges. As Professor Glen O. Robinson, a former member of the Federal Communications Commission, has commented:

Robinson, The Federal Communications Commission: An Essay on Regulatory Watchdogs, 64 Va.L.Rev. 169, 185-86 (1978) (footnotes omitted).38

The Cinderella view of a neutral and detached adjudicator is simply an inapposite role model for an administrator who must translate broad statutory commands into concrete social policies.39 If an agency official is to be effective he must engage in debate and discussion about the policy matters before him. As this court has recognized before, "informal contacts between agencies and the public are the `bread and butter' of the process of administration." Home Box Office, Inc. v. FCC, 185 U.S.App. D.C. 142, 190, 567 F.2d 9, 57 (D.C.Cir.) (per curiam), cert. denied, 434 U.S. 829, 98 S.Ct. 111, 54 L.Ed.2d 89 (1977).40

Our view is consistent with two Supreme Court opinions that detail prejudgment standards for administrators who speak out on public policy matters. In Hortonville Joint School District No. 1 v. Hortonville Education Association, 426 U.S. 482, 96 S.Ct. 2308, 49 L.Ed.2d 1 (1976), the Court held that the due process clause did not bar a local school board, which was negotiating renewal of a collective-bargaining agreement with teachers, from dismissing teachers who were engaged in an illegal strike following failure of the contract negotiations.41 The Court stated that a decisionmaker need not be disqualified "simply because he has taken a position, even in public, on a policy issue related to the dispute, in the absence of a showing that he is not `capable of judging a particular controversy fairly on the basis of its own circumstances.'" Id. at 493, 96 S.Ct. at 2314 (quoting United States v. Morgan, 313 U.S. 409, 421, 61 S.Ct. 999, 85 L.Ed. 1429 (1941)).

The Court's decision in FTC v. Cement Institute, 333 U.S. 683, 68 S.Ct. 793, 92 L.Ed. 1010 (1948), is likewise instructive. There, a trade association urged that the Commission be disqualified from deciding whether a trade practice violated the antitrust laws because its members previously had endorsed the view before both the Congress and the President that the practice was the equivalent of illegal price-fixing. The Court rejected the trade association's claim because, inter alia, the earlier statements "did not necessarily mean that the minds of [Commission] members were irrevocably closed." Id. at 701, 68 S.Ct. at 803.42

A similar standard is applicable to section 18 rule-making. Section 18 outlines a process by which the Commission must form a preliminary view on a proposed rule, must hear comment from concerned parties, and in some cases, must hold trial-type proceedings before deciding whether to promulgate a rule. There is no doubt that the purpose of section 18 would be frustrated if a Commission member had reached an irrevocable decision on whether a rule should be issued prior to the Commission's final action. At the same time, the Commission could not exercise its broad policymaking power under section 18 if administrators were unable to discuss the wisdom of various regulatory positions. That discussion necessarily involves the broad, general characterizations of reality that we label legislative fact.

Accordingly, a Commissioner should be disqualified only when there has been a clear and convincing showing that the agency member has an unalterably closed mind on matters critical to the disposition of the proceeding. The "clear and convincing" test is necessary to rebut the presumption of administrative regularity. See, e. g., Withrow v. Larkin, 421 U.S. 35, 55, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975); Hercules, Inc. v. EPA, 194 U.S.App.D.C. 172, 204, 598 F.2d 91, 123 (D.C.Cir.1978). The "unalterably closed mind" test is necessary to permit rulemakers to carry out their proper policy-based functions while disqualifying those unable to consider meaningfully a section 18 hearing.43

V

We view the statements offered as grounds for disqualification as a whole to discern whether they evidence a clear and convincing showing that Chairman Pertschuk has an unalterably closed mind on matters critical to the children's television proceeding. The most important evidence submitted by the appellees is a speech Chairman Pertschuk delivered in November 1977 to the ACT Research Conference. The other materials generally derive from this speech.44

The speech focused on whether section 5 of the FTC Act, which prohibits "unfair or deceptive acts or practices," may be applicable to children's advertising. Pertschuk first asserted that children have only a minimal understanding of the nature of television commercials and are unable to distinguish between advertising and other forms of information. He quoted a finding by the Federal Communications Commission that "many children do not have the sophistication or experience needed to understand that advertising is not just another form of informational programming."45

Pertschuk then set out relevant legal principles. He quoted a Supreme Court opinion that gave the Commission wide-ranging discretion to declare a trade practice unfair.46 He noted the legal recognition of children's lack of evaluative capacity and the concomitant protection for children built into commercial and tort law. Among the doctrines he mentioned were the unenforceability of a contract signed by a child, the prohibition against selling children otherwise legal goods, such as liquor and cigarettes, the bar against children leaving school or driving a car, and the "attractive nuisance" rule of liability, which holds persons who maintain conditions on their property that are likely to entice small children responsible for harm to those children.

Pertschuk continued by discussing the effects of advertising on children. He explained that "children are not adults in miniature. Instead, they bring to advertising a special perspective and sensibility— a credulousness that comes from inexperience— which advertisers exploit."47 He stated that sugared foods may be harmful to children and that children may not understand the health problems, like tooth decay, that can result from excessive consumption of sugared products: "Children lack the judgment and experience to see that something that looks good to them in the short run can hurt them in the long run."48 He suggested that children's advertising might be deceptive because it highlights the general desirability of sugared foods without providing material information on the health risks.

Finally, Pertschuk noted that any action taken against children's advertising would bring opposition from affected economic interests. He said that "[i]f the Commission is to reach sound and reasoned judgments, it must also hear from the parents, the teachers, the pediatricians, the dentists, those health and education specialists on whom we rely for the advocacy of our children's best interest."49 Pertschuk concluded by stating: "[W]e must be rigorous and open-minded in our analysis of both law and fact."50

Chairman Pertschuk's remarks, considered as a whole, represent discussion, and perhaps advocacy, of the legal theory that might support exercise of the Commission's jurisdiction over children's advertising. The mere discussion of policy or advocacy on a legal question, however, is not sufficient to disqualify an administrator.51 To present legal and policy arguments, Pertschuk not unnaturally employed the factual assumptions that underlie the rationale for Commission action. The simple fact that the Chairman explored issues based on legal and factual assumptions, however, did not necessarily bind him to them forever. Rather, he remained free, both in theory and in reality, to change his mind upon consideration of the presentations made by those who would be affected.

In outlining his legal theory of "unfairness," Pertschuk suggested that children might be harmed by overconsumption of sugared products and that they might not be able to comprehend the purpose of advertising. Insofar as these conclusions are ones of fact, they are certainly of legislative fact. Neither conclusion bears on the particular activities of any specific advertiser or food manufacturer or makes reference to the health or comprehension of any particular child. These conclusions are broad and general, far removed from the narrow, detailed facts that were at the heart of the Cinderella case.52

Together, the two conclusions tend to show that children may be "injured" by the advertising of highly sugared products. The Commission has stated that it will consider three factors in deciding whether a trade practice is unfair: whether the action is (1) offensive to public policy as established by some legal doctrine, (2) immoral, and (3) substantially injurious to consumers.53 Chairman Pertschuk scarcely could have discussed the "unfairness" doctrine without assuming for the purpose of discussion that some injury might result from the trade practice in question.

We also note that Chairman Pertschuk made the challenged comments before the Commission adopted its notice of proposed rulemaking. This court has never suggested that the interchange between rulemaker and the public should be limited prior to the initiation of agency action.54 The period before the Commission first decides to take action on a perceived problem is, in fact, the best time for a rulemaker to engage in dialogue with concerned citizens. Discussion would be futile, of course, if the administrator could not test his own views on different audiences. Moreover, as we stated earlier,55 an expression of opinion prior to the issuance of a proposed rulemaking does not, without more, show that an agency member cannot maintain an open mind during the hearing stage of the proceeding.

Indeed, section 18 in effect requires the Commission to formulate tentative judgments on suggested rules. Before the Commission initiates rulemaking proceedings, it must "publish a notice of proposed rulemaking stating with particularity the reason for the proposed rule prior to the comment stage of the proceeding." 15 U.S.C. § 57a(b). The Conference Committee on the Magnuson-Moss Act referred to the period following this notice as one during which affected parties could "challenge the factual assumptions on which the Commission is proceeding and to show in what respect these assumptions are erroneous." H.R.Rep.No. 93-1606, supra at 33. Congress intended for the Commission to develop proposals that subsequently would be published and discussed openly. To perform this task intelligently necessarily involves making tentative conclusions of fact, even if they later are open to public challenge.

In sum, we hold that the materials adduced by the appellees are insufficient to rebut the strong presumption of administrative regularity.56 The materials, as a whole, merely demonstrate that Pertschuk discussed a legal theory by which the Commission could adopt a rule, if circumstances warranted. The statements do not demonstrate that Chairman Pertschuk is unwilling or unable to consider rationally argument that a final rule is unnecessary because children are either unharmed by sugared products or are able to understand advertising. The appellees have failed to make a clear and convincing showing that Chairman Pertschuk has an unalterably closed mind on matters critical to the children's television proceeding.

VI

The appellees have a right to a fair and open proceeding; that right includes access to an impartial decisionmaker. Impartial, however, does not mean uninformed, unthinking, or inarticulate. The requirements of due process clearly recognize the necessity for rulemakers to formulate policy in a manner similar to legislative action. The standard enunicated today will protect the purposes of a section 18 proceeding, and, in so doing, will guarantee the appellees a fair hearing.

We would eviscerate the proper evolution of policymaking were we to disqualify every administrator who has opinions on the correct course of his agency's future action. Administrators, and even judges, may hold policy views on questions of law prior to participating in a proceeding. The factual basis for a rulemaking is so closely intertwined with policy judgments that we would obliterate rulemaking were we to equate a statement on an issue of legislative fact with unconstitutional prejudgment. The importance and legitimacy of rulemaking procedures are too well established to deny administrators such a fundamental tool.

Finally, we eschew formulation of a disqualification standard that impinges upon the political process. An administrator's presence within an agency reflects the political judgment of the President and Senate. As Judge Prettyman of this court aptly noted, a "Commission's view of what is best in the public interest may change from time to time. Commissions themselves change, underlying philosophies differ, and experience often dictates changes." Pinellas Broadcasting Co. v. FCC, 97 U.S. App.D.C. 236, 238, 230 F.2d 204, 206 (D.C. Cir.), cert. denied, 350 U.S. 1007, 76 S.Ct. 650, 100 L.Ed. 869 (1956). We are concerned that implementation of the Cinderella standard in the rulemaking context would plunge courts into the midst of political battles concerning the proper formulation of administrative policy. We serve as guarantors of statutory and constitutional rights, but not as arbiters of the political process. Accordingly, we will not order the disqualification of a rulemaker absent the most compelling proof that he is unable to carry out his duties in a constitutionally permissible manner.

Reversed.

LEVENTHAL, Circuit Judge, concurring:

I concur in Judge Tamm's opinion for the court. It makes important contributions to our understanding of the issues. My comments on the merits are to add the perspective that a concurring opinion sometimes permits. On the jurisdictional issues, I have additional views which in the end I do not present for this case but set forth to govern future proceedings.

A.

The ultimate test announced by Judge Tamm as to the merits is that disqualification from a rulemaking proceeding results "only when there has been a clear and convincing showing that [the agency member] has an unalterably closed mind on matters critical to the disposition of the [proceeding]." The test reflects a Supreme Court ruling as to administrative agencies.1

It is not far removed from the test used in considering challenges to those considered for the duty as jurors quintessentially engaged in specific fact-finding.2 It is similar to a standard articulated as to recusal of judges.3

The application of this test to agencies must take into account important differences in function and functioning between the agencies and court systems. In fulfilling the functions of applying or considering the validity of a statute, or a government program, the judge endeavors to put aside personal views as to the desirability of the law or program, and he is not disqualified because he personally deems the program laudable4 or objectionable.5 In the case of agency rulemaking, however, the decisionmaking officials are appointed precisely to implement statutory programs, and with the expectation that they have a personal disposition to enforce them vigilantly and effectively. They work with a combination rather than a separation of functions, in legislative modes, and take action on the basis of information coming from many sources, even though that provides a mindset before a proceeding is begun, subject to reconsideration in the light of the proceeding.

Judge Tamm's opinion for the court ventilates important distinctions between rulemaking and adjudication and their consequences in terms of standards of disqualification, and the differences between adjudicative facts pertinent to specific parties and generalized legislative facts, including predictions and underlying views on policy. As Judge Tamm notes, the differences generally identify differences in procedure required for their determination.6 The difference in nature of issues persists, as Judge Tamm points out, even though some of the tasks of rulemaking are carried out with adaptations of adjudicative forms, whether this additional procedure is adopted voluntarily by the agency, as has sometimes been the case, or is required by court or legislation.

The provisions of the Moss-Magnuson Act have been widely recognized as in effect incorporating into statutory law the approach identified in a number of decisions, primarily decisions of this court. Those decisions set forth the proposition that although rulemaking generally proceeds merely upon the basis of written comment on a proposal, some specific issues are of such a nature that meaningful opportunity for comment requires additional scope for presentation, perhaps by oral submission in the form of a legislative hearing, perhaps by cross-examination in matters involving a specific factual issue where meaningful comment requires a predicate of probing the basis for the contrary views. The train of opinions in this circuit runs from American Airlines, through Holm v. Hardin, to International Harvester, which had the highest visibility and became the focal point of discussion.7

It is fair to say that in all of our opinions the assumption was that particular issues might require additional procedures, if they were contested, but that the basic framework of the rulemaking proceeding as one primarily dependent on general policy formulation was unaffected by the particular procedures. Of course, there remains a requirement of fairness for those with authority to act by rulemaking but the standards are not identical with those pertinent for judicial-type decisionmaking in adjudicatory actions.

Consider, for example, the assertions of an agency head that he discerns abuses that may require corrective regulation. One can hypothesize beginning an adjudicatory proceeding with an open mind, indeed a blank mind, a tabula rasa devoid of any previous knowledge of the matter. In sharp contrast, one cannot even conceive of an agency conducting a rulemaking proceeding unless it had delved into the subject sufficiently to become concerned that there was an evil or abuse that required regulatory response. It would be the height of absurdity, even a kind of abuse of administrative process, for an agency to embroil interested parties in a rulemaking proceeding, without some initial concern that there was an abuse that needed remedying, a concern that would be set forth in the accompanying statement of the purpose of the proposed rule.

In its administrative setting an agency's effort is not limited to one type of activity. Investigation and policy-making are integral to the total function just as much as decisionmaking. It is appropriate and indeed mandatory for agency heads and staff to maintain contacts with industry and consumer groups, trade associations and press, congressmen of various persuasions, and to present views in interviews, speeches, meetings, conventions, and testimony. The agency gathers information and perceptions in a myriad of ways and must use it for a myriad of purposes.8 With capacity and willingness to reconsider there is no basis for disqualification.

The tests of disqualification cannot be applied identically for judges and agency heads, for reasons already identified. Yet even judges are not disqualified merely because they have previously announced their positions on legal issues,9 even as to announcements outside the course of written decisions.10 Judicial disqualification cannot be based on general frame of reference, attitudes or assumptions as to the processes of society.11 And even a judge's public comment giving a general impression of a state of facts does not present a rigidity against refinement and reflection that disqualifies him from sitting in judgment on a particular fact issue.12

B.

I now turn to what I consider a jurisdictional problem. In part it is addressed in part II of Judge Tamm's opinion, dealing with the doctrine of exhaustion of administrative remedies. I concur in many of Judge Tamm's observations, and the court's result. But my analysis is somewhat different.

The jurisdictional problems that concern me are first, whether, and under what circumstances, a Federal court has jurisdiction of an action to halt ongoing proceedings before an "agency" of the United States on the ground that they reflect impermissible bias or prejudice, and second, whether this can ever be done by a district court that has no jurisdiction to review the agency's final actions.

The doctrine of exhaustion of administrative remedies, which Judge Tamm discusses, is a judge-made prudential doctrine — a "rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638 (1938). The Court gave little weight to the claim "that the mere holding of the prescribed administrative hearing would result in irreparable damage." 303 U.S. at 51, 58 S.Ct. at 464.

The jurisdictional difficulty arises out of the requirement of finality, a related doctrine which also comes into play in this case, and which overlaps the requirement of exhaustion of administrative remedies but is analytically distinct. One requirement may be applicable even when the other is not.

The Administrative Procedure Act provides, § 10(c), now 5 U.S.C. § 704: "Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action." Statutes with special provisions for judicial review reflect the the same basic approach, of limiting review to final actions, and that is the case for the Moss-Magnuson Act's provision for judicial review (in the court of appeals) of FTC rulemaking.13

Section 10(c) of the APA is a generalized provision for judicial review by the district court where no other form of judicial review is prescribed by Congress. But it requires more than exhaustion of administrative remedies, it also requires a final agency action. Association of National Advertisers, Inc. v. FTC, 565 F.2d 237 (2nd Cir. 1977). It is elementary that the mere conduct of proceedings on a proposal of a rule, which may never be adopted or enforced, is not final action, and a court will not enjoin a rulemaking proceeding on a claim that the agency had no statutory or constitutional authority to promulgate the proposed rule. Bristol-Myers Co. v. FTC, 138 U.S. App.D.C. 22, 27, 424 F.2d 935, 940, cert. denied, 400 U.S. 824, 91 S.Ct. 46, 27 L.Ed.2d 52 (1970).

If a proceeding should eventuate in a rule that a party opposes, the party may challenge the final action adopting the rule on the ground that the rule is defective for reasons of disqualification of a member. Accordingly, this is not a case of agency action (other than final action) "for which there is no other adequate remedy in a court." Only in rare instances is a non-final agency action reviewed in the teeth of a general denial of jurisdiction. In Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958) the Court was willing to bypass a general jurisdictional barrier when an agency clearly violated an express statutory prohibition. But the Leedom exception "is a narrow one."14 It is reserved for the kind of clear case that identified the original doctrine of mandamus.

A court must disclaim jurisdiction notwithstanding the claim that action already taken realistically means that the ongoing proceeding will be waste motion and will have to be done over again. This is "part of the price we pay for the advantages of an administrative process" and preferable to having the process "clogged if there were interlocutory appeals to the courts." Thermal Ecology Must Be Preserved v. Atomic Energy Comm., 139 U.S.App.D.C. 366, 368, 433 F.2d 524, 526 (1970). That opinion noted the possibility of an exception "in extreme instances where the action is held to constitute an effective deprivation of appellant's rights." Id. See also Sterling Drug, Inc. v. FTC, 146 U.S.App.D.C. 237, 250, 450 F.2d 698, 711 (1971).

Given these strong walls of jurisdictional barriers, and narrow gates of entrance, it is time to turn to the situation of a claim of prejudice or bias alleged to infect an agency proceeding at its core.

When a claim of bias is filed against a trial judge, his refusal to recuse himself is not appealable, there being no final order. However, there has been some tendency of the appellate courts to accept jurisdiction of the claim, notwithstanding their general confinement to review of final orders, of district courts, by reference to consider the matter on application for a writ of mandamus, at least in unusual cases, with jurisdiction predicated on the All-Writs Act, 28 U.S.C. § 1651.15 That jurisdiction is not routinely invoked, and rulings are generally phrased in terms of "exceptional circumstances."16 Mandamus was denied in Mitchell v. Sirica, 163 U.S.App.D.C. 373, 502 F.2d 375, cert. denied, 418 U.S. 955, 94 S.Ct. 3232, 41 L.Ed.2d 1177 (1974), notwithstanding the view of the dissent that the case was one of the "really extraordinary cases" that warrant mandamus, and that mandamus was appropriate under the All-Writs Act in cases "which are subject to our eventual appellate jurisdiction." (163 U.S.App. D.C. at 385, 502 F.2d at 387).

Even assuming arguendo that the case is one which this court would consider at an interlocutory stage as to a request for disqualification of a judge, it by no means follows that a court has jurisdiction to intervene in an ongoing administrative process. The courts have a limited supervisory province as to agencies,17 but it is not as direct as the supervision of appellate courts over trial courts, and there are distinct limitations on available judicial remedies. Vermont Yankee Nuclear Power Corp. v. National Resources Defense Fund, 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978); FCC v. Pottsville Broadcasting & Co., 309 U.S. 134, 60 S.Ct. 437, 84 L.Ed.2d 656 (1940); Greater Boston TV Corp. v. FCC (II), 149 U.S.App.D.C. 322, 335, 463 F.2d 268, 281 (1971).

If there is to be an analogy to an expansion of mandamus of district judges, based on the existence of the appellate court's prospective jurisdiction, the jurisdiction would not lie in the district court, but in the court of appeals, which is where Congress had lodged general jurisdiction to review FTC orders and rules, 15 U.S.C. § 57a. To the extent that the All Writs Act has been used in connection with FTC matters, it is the court of appeals that has been found to have the power to grant relief. FTC v. Dean Foods Co., 384 U.S. 597, 86 S.Ct. 1738, 16 L.Ed.2d 802 (1966). On this thesis I posit a total lack of jurisdiction in the district court to consider the merits of plaintiff's case in any way or to any extent. Thus, even if this case fell within an exception to the finality requirement, jurisdiction to consider the interlocutory action would lie in this court and not the district court. But I recognize that this thesis has not previously been identified by the court and was not perceived in the 1962 Amos Treat decision, to be discussed below. Amos Treat issued prior to the Supreme Court's Dean Foods decision and is subject to reconsideration on this point.18 But since this point is novel, and was not argued, I agree that it should not be given effect retrospectively.

Reverting to issues of bias or prejudice, this court has basically exercised its supervision in the context of review of final orders, Cinderella Career & Finishing Schools, Inc. v. FTC, 138 U.S.App.D.C. 152, 425 F.2d 583 (1970); Texaco, Inc. v. FTC, 118 U.S.App.D.C. 366, 336 F.2d 754 (1964), vacated and remanded on other grounds, 381 U.S. 739, 85 S.Ct. 1798, 14 L.Ed.2d 714 (1965).

To the extent that there is any judicial jurisdiction to halt an ongoing agency proceeding — or what is the equivalent, to enter a declaratory judgment that it cannot result in a valid final action — that jurisdiction, whether exercised by this court or (let it be assumed) by a district court, is available only in a limited class of cases, not including the case at bar. There is always some problem of analysis when a court's determination of whether it has jurisdiction requires it to take a "peek at the merits."19 But I think the doctrine can be etched fairly clearly.

The precedent primarily relied on by plaintiffs is Amos Treat & Co. v. SEC, 113 U.S.App.D.C. 100, 306 F.2d 260 (1962). The court enjoined an adjudicatory proceeding because one of the commissioners who had participated in certain rulings had previously, as a member of the staff, participated in the investigation. That decision was a ruling of a structural incapacity, which was necessary for a "fair trial" (113 U.S.App. D.C. at 103, 306 F.2d at 263). The next year another panel, Judges Bazelon, Bastian and Burger, described it as an "exceptional" case, SEC v. R. A. Holman & Co., 116 U.S.App.D.C. 279, 323 F.2d 284, cert. denied, 375 U.S. 943, 84 S.Ct. 350, 11 L.Ed.2d 274 (1963). In Holman the court refused to halt an SEC adjudicatory proceeding on the ground that one of the commissioners had headed a division with responsibility over the registration statement involved. In Associated Press v. FCC, 145 U.S.App.D.C. 172, 448 F.2d 1095 (1971), the court followed Holman, not Amos Treat. And in Sterling Drug, Inc. v. FTC, 146 U.S.App.D.C. 237, 450 F.2d 698 (1971), the court followed Holman and referred to Amos Treat as a case "where the agency has very clearly violated an important constitutional or statutory right." (146 U.S.App.D.C. at 249, 450 F.2d at 710) (emphasis added).

The only instance where Amos Treat was followed, in terms of judicial intercession at a non-final stage, was Fitzgerald v. Hampton, 152 U.S.App.D.C. 1, 467 F.2d 755 (1972), and that, too, was a structural violation — the denial of a public hearing.

If a federal court, district or appellate, is to take jurisdiction before final agency action, it can only be in a case of "clear right" such as outright violation of a clear statutory provision (Leedom) or violation of basic rights established by a structural flaw, and not requiring in any way a consideration of interrelated aspects of the merits — which can only be done appropriately on review of a final order. This statement of the doctrine of the exceptions to finality is etched more sharply here than in some of our previous opinions, though it is offered as an accurate statement of what the opinions as a whole were driving at. However, this sharpening of doctrine has aspects of novelty, since earlier expressions referred to denial of basic rights and did not articulate the qualifications of structural flaw, or defiance of an outright prohibition. On that basis, as will be indicated below, I am prepared to agree that the district court's acceptance of jurisdiction not be rescinded retroactively, and to acquiesce in its taking jurisdiction. That still leaves us, however, with the necessity to determine whether the judicial ruling (of disqualification) was proper on the merits. And it was not proper, in my view, for reasons developed in Judge Tamm's opinion for the court.

A strict logician might have ground to attack this concept of a jurisdictional ruling announced for the future. In the same way, a strict logician could assail the doctrine whereby courts deliberately decide, on prudential grounds, to pass over jurisdictional questions and to dispose of a case on the merits. But that doctrine is alive, and fortified by pragmatic considerations involved in sound judicial administration.20

The case at bar is one where the very inquiry posed by plaintiff obviously requires some analysis of the views expressed by Chairman Pertschuk, and comparison with the issues as they will actually be focused in the ongoing proceeding. The Government puts forward substantial considerations in justification of Chairman Pertschuk's remarks — the proper purpose of calling the public's attention to possible abuses and to factors enhancing public understanding, the propriety of a hortatory role on a wide range of issues, the breadth of the underlying policy issues, as contrasted with the quality of rulings on specific, adjudicative effects (with the corollary likelihood of specific condemnation and stigma). But even if one pretermits all such considerations, the actual conduct of the proceeding may bear significantly on the relationship of the remarks to ultimate issues, let alone dispositions, which are necessary aspects of any claim of prejudicial bias.

These factors make it clear to me that any residue of the Amos Treat doctrine is inapplicable to this case.

C.

If this matter were to arise subsequent to the instant decision, it would in my view have been obligatory of the district court to deny jurisdiction, even assuming prefinality intervention as to the FTC is not confined to a circuit court of appeals, because this was not a case involving a defiance of an explicit statute, or a structural flaw denying basic rights. And in the future any exercise of jurisdiction by a district court should be reversed by a judgment vacating the district court's order, with instructions to dismiss for lack of jurisdiction. However, in this case I join in the order of reversal. This is partly due to the area of doubt left in the wake of our previous rulings, including Amos Treat and Fitzgerald, making it proper to consider that a more firm rule of prohibiting consideration of the merits should be announced for prospective application, under the Sunburst21 approach — so as to avoid undoing a ruling of district court jurisdiction to consider the merits, that was not unreasonable when made. Reinforcing our decision to consider the merits in this case is the fact that under its not unreasonable assertion of jurisdiction the district court issued a ruling on the merits that for more than a year22 has constituted a stain on the FTC proceeding. That stain would persist if the appellate court confined itself to a jurisdictional ruling, to the detriment of sound governmental process.

MacKINNON, Circuit Judge (dissenting in part and concurring in part).

I concur in the Court's decision insofar as it holds that (1) the Appellee, Association of National Advertisers (hereafter Association) is not required to exhaust the rulemaking process before filing a court challenge to disqualify one of the Commissioners for bias in such rulemaking proceeding; and (2) that affected parties are entitled to have substantive rules of the Federal Trade Commission proscribing specific unfair or deceptive acts or practices promulgated by fair decisionmakers. However, I cannot agree with the holding of the majority that a member of the Commission engaged in the rulemaking proceeding can be disqualified only upon a showing by clear and convincing evidence that he has an unalterably closed mind on matters critical to the disposition of the rulemaking. Also, based on the analysis hereinafter detailed, I would hold that the Chairman has disqualified himself in this rulemaking proceeding even if the majority's "unalterably closed mind" standard is applied.

In my opinion the "unalterably closed mind", where it exists, in many cases is practically impossible to prove, imposes too high a barrier to the public's obtaining fair decisionmakers and is a higher standard than the Supreme Court has applied in its recent decisions. I would require any Federal Trade Commissioner to recuse himself, or failing that to be disqualified, upon a showing by a preponderance of the evidence that he could not participate fairly in the formulation of the rule because of substantial bias or prejudgment with respect to any critical fact that must be resolved in such formulation.

Also, in my view the majority opinion places too much reliance on the strict rulemaking/adjudication dichotomy, applied in earlier cases under the Administrative Procedure Act. The Magnuson-Moss Act creates a rulemaking procedure that combines elements of both rulemaking and adjudication, as those functions are exercised under the Administrative Procedure Act, and this blending of the two procedures makes it impossible to look at Magnuson-Moss rulemaking as anything but a combination of the two.

I. RULEMAKING BEFORE AND AFTER THE MAGNUSON-MOSS ACT.

Congress enacted the Magnuson-Moss Act on January 4, 1975. These amendments were part of the Federal Trade Commission Improvements Act (also known as the Magnuson-Moss Act, hereafter the Act) in which Congress limited the prior wide open authority of the Federal Trade Commission to make "rules which define with specificity acts or practices which are unfair or deceptive acts or practices in or affecting commerce . . ." Section 18(1)(B). (Emphasis added). The Act blends some of the administrative procedures — rulemaking and adjudication — that had theretofore been rigidly separated in the Administrative Procedure Act. 88 Stat. 2193, 15 U.S.C. § 57a.

Prior to the Magnuson-Moss Act the Federal Trade Commission possessed great latitude in exercising its informal rulemaking authority. As was pointed out in the Senate debates, the amendment of its rulemaking powers by the Federal Trade Commission Improvement Act, as embodied in S. 356 of the 93rd Congress, 2nd Session (1974), was considered necessary because the Supreme Court "in a recent ruling had given the Federal Trade Commission very broad rulemaking power that was subject only to the due process requirement [and thereafter the House side in its consideration of S. 356 worked out] . . . considerable procedural safeguards . . . relating to the rulemaking power of the Federal Trade Commission." (Remarks of Senator Taft, 120 Cong.Rec. 40723, December 18, 1974).

The House Committee Report on the bill also complained of the "inadequate" proceedings that the Federal Trade Commission followed in its rulemaking.

H.Rep.No. 93-1107, June 13, 1974, 93rd Cong., 2nd Sess., 33 U.S.Code Cong. & Admin.News 1974, pp. 7702, 7715. To provide the "needed . . . safeguards" the House passed its bill that with some modifications made by the Senate, resulted in the Federal Trade Commission Improvements Act of 1974, supra. It is obvious from the foregoing that one of the principle purposes of the amendments was to improve the "integrity [of Commission rulemaking that rested] . . . on the resolution of issues of material fact." This is an obvious reference to the adjudicative function involved in the promulgation of rules on unfair and deceptive practices by the Commission.

In adopting the Magnuson-Moss (M-M) Amendments Congress authorized the Commission to promulgate rules that defined specific "unfair or deceptive acts or practices in or affecting Commerce" and tightened up the procedures that the Commission was required to follow in exercising this very considerable authority. See section 18(a)(1)(B). The M-M Amendments provided for (1) advance notice of the proposed rule and the reason therefor, (2) an informal hearing with oral or written submissions, (3) cross-examination on disputed issues, (4) right to rebuttal, (5) verbatim transcripts of all oral presentation to be made available to the public; and that (6) the rule be supported by the whole of the rulemaking record, and (7) the basis and purpose of the rule be set forth in a statement. The Commission was also required to take into account (8) the economic effect of any such rule and (9) the effect on small business and consumers. (10) The promulgation of the rule was made subject to judicial review by the Courts under 5 U.S.C. § 706(2) and (11) could be declared unlawful if the Court found it was not "supported by substantial evidence in the rulemaking record . . . taken as a whole."1 (12) The subsequent amendment or repeal of rules was also made subject to judicial review in the same manner as the original adoption of such rules. In addition (13) the court was required to find the rule to be unlawful if the Commission, by the denial of cross examination or rebuttal submissions, had precluded disclosure of material facts which was necessary for fair determination by the Commission of the Rulemaking proceeding taken as a whole.2

Senator Taft commented on the effect of these provisions of the Bill as follows:

120 Cong.Rec. 40723-40724, December 18, 1974. (Emphasis added).

It is thus apparent that the promulgation of unfair or deceptive practices under the Magnuson-Moss Act differs greatly from mere informal rulemaking under the tight compartments first established by the Administrative Procedure Act in 1946 (60 Stat. 238-239).

The majority's opinion criticizes the characterization by the District Court of Federal Trade Commission rulemaking under the Magnuson-Moss Act as "hybrid" or quasiadjudicative on grounds that it "ignores the clear scheme of the APA". Of course such Magnuson-Moss Act rulemaking ignores the clear scheme of the APA. That was one of the stated and obvious purposes of the Act — to provide greater protection to the public that would be affected by the FTC rules, by providing some reasonable safeguards when the Commission promulgated rules prescribing specific "unfair or deceptive acts or practices."3 Rulemaking under the Administrative Procedure Act prior to the Magnuson-Moss Act was ordinarily cast either in an adjudicatory or rulemaking context but the Magnuson-Moss Act changed all of this for rulemaking of unfair or deceptive acts or practices by the Federal Trade Commission.4 See Majority Opinion p. ___ of 201 U.S.App.D.C., p. 1159 of 627 F.2d.

The Court's opinion is couched too much in a rulemaking/adjudication dichotomy and tries to pigeonhole Commission action into one or the other. For instance, it states that the "presence of procedures not mandated by Section 553 . . . does not . . . convert rulemaking into quasi-adjudication . . . ." That statement however blinks at the reality that exists in this instance of rulemaking. It should also be noted that Professor Davis, in setting forth his suggested "Official Notice" for rulemaking proceedings, defines "adjudicative facts [as] facts relating to the parties to the case . . . when a rule is formulated in an on-the-record proceeding."5 The Commission's action in promulgating the instant rules is required to be supported by substantial evidence in the rulemaking record as a whole. However, regardless of labels, the procedures required by M-M in this case certainly converts the Commission's action into something that is not wholly covered by Section 553 and that is not wholly quasi-adjudication. The Act creates a new form of Commission action that is outside the informal rulemaking category as previously covered solely by section 553, by the addition of elements that definitely involve adjudication.

II. ADJUDICATIVE CHARACTER OF MAGNUSON-MOSS ACT PROCEEDINGS.

Professor Davis has pointed out that some rulemaking may involve the determination of adjudicative facts:

These observations clearly describe many of the aspects of the Magnuson-Moss Rulemaking and in the last sentences reach the facts of this case.

The adjudicative character of some of the proceedings under the Magnuson-Moss Act is also reflected in the April, 1979 recommendation made by the Administrative Conference with respect to the trade regulation rulemaking project of the Federal Trade Commission. Therein the Conference stated:

April, 1979 Recommendations of the Administrative Conference, paragraph 12. (emphasis added)

One should not be blind to the fundamental changes made in Commission procedures for regulating unfair and deceptive acts and practices by the Magnuson-Moss Act. The Separate Views on Title II of the Act by 12 members of the House Commerce Committee that strongly supported the new rulemaking procedures of the Magnuson-Moss Bill, also indicated that Congress knew that it was making substantial changes in the informal rulemaking proceedings provided for in section 553 of the Administrative Procedure Act. Cf., Commission's pre-1975 Rules and Procedures, Section 1.16 to (c), (d). The statement of the 12 members included the following:

These criticisms of informal rulemaking under Section 553 were what the 12 members considered they were changing for the making of unfair and deceptive acts and practices rules by the Federal Trade Commission under the Magnuson-Moss Act.

III. DOES THE SUBSTANTIAL EVIDENCE STANDARD OF THE MAGNUSON-MOSS ACT APPLY ONLY TO DISPUTED ISSUES OF MATERIAL FACT OR DOES IT ALSO APPLY TO FINDINGS AND DETERMINATIONS OF LEGISLATIVE FACT?

The substantial evidence scope of review of a Magnuson-Moss proceeding further illustrates its adjudicatory nature. However, the Commission contends that "the substantial evidence" standard for judicial review was intended only to apply to "the findings and conclusions of the Commission with regard to disputed issues of material fact on which the rule is based" and "would not apply to findings or determinations of legislative fact".7 The Conference Report does make this statement but the plain language of Section 18(e)(3)(A) provides that the Court shall set aside the rule if:

15 U.S.C. § 57(e)(3)(A).

The Commission's contention in this respect, which seeks to answer attacks upon the "rule" that the Commission promulgated, in addition to being contrary to the language of the statute, is also contrary to the statements of Senator Moss and Representative Broyhill and others made on the floor of Congress during passage of the Magnuson-Moss Act. The reason for such amendments to the Commission Act was explained by Senator Moss as follows:

Similarly as Representative Broyhill observed:

Senator Taft remarked:

This legislative history indicates, and Representative Broyhill's statement is the clearest, that "substantial evidence" in the rulemaking record as a whole is required to support any rule proscribing any specific unfair or deceptive act or practice promulgated by the Commission. To the extent that the statement by Senator Moss expressed a different formulation, it only varied slightly to require that any rule that the Commission adopted must follow logically from findings of fact supported by substantial evidence on the record as a whole. If there is any material difference in the actual application of these two analyses, it is relatively immaterial in determining the Chairman's disqualification in this case, because both point to the controlling effect that results from decisions of the Commission on factual findings and conclusions therefrom and these are the precise areas where the Chairman by his prior statements and conduct has indicated his bias and prejudgment.

To all of these comments with respect to Section 18 rulemaking should be added an extract from a recent article by Professor Antonin Scalia, the former Chairman of the Administrative Conference of the United States. In the article, Professor Scalia decries the "balkanization of administrative law" and blames (besides this court) Congress' increasing interest in promulgating unique procedural requirements with each new statute. Scalia would opt instead for "standardizing mandatory administrative procedures within a manageable number of well-known and well-litigated forms," and describes how Congress' disinclination to do so in the Magnuson-Moss Act necessarily produced the result reached by Judge Gesell in the court below.

Thus, Professor Scalia agrees that the result reached by Judge Gesell, with which I agree, is dictated by the unusual procedural model of the Magnuson-Moss Act. His. italicized characterization of the "[forceful and] vigorous . . . expression of prejudgment [and] . . . prejudice" is a sound evaluation of the prejudicial character of the Chairman's remarks and conduct by an impartial and learned observer. It is also my view that Chairman Pertschuk's disqualification can be supported on statutory grounds, i. e., the statute requires action to be determined by the Commission on the record evidence as a whole; such determination necessarily implies a fair determination, otherwise the presentation of evidence is a hollow formality.

IV. THE MAJORITY'S DESCRIPTION OF THE CHAIRMAN'S REMARKS & CONDUCT.

The majority opinion holds, and I agree with such holding, that "The appellees have a right to a fair and open proceeding; that right includes access to an impartial decisionmaker." Maj. op. p. ___ of 201 U.S. App.D.C., p. 1174 of 627 F.2d. However, the majority considers that one qualifies as an "impartial decisionmaker" unless he is shown by clear and convincing evidence to have an unalterably closed mind on matters critical to the children's television proceeding. This rule would establish a legal principle that evidence of bias and prejudice would not be disqualifying unless it could surmount a fence that is horse high, pig tight and bull strong. In my view that is too much protection for a biased decisionmaker. In a great many instances it would deprive the public of decisionmakers that are actually "impartial".

The current case is a good example and also illustrates how strong evidence of prejudgment can be played down to almost sanitize the attitudes expressed. Such softening of the Chairman's remarks is illustrated by the following excerpts from the majority opinion:

Maj. op. pp. ___ - ___ of 201 U.S.App. D.C., pp. 1171-1172 of 627 F.2d. [Footnote omitted].

The opinion then indulges in a more particularized discussion of some of the specific comments that the Chairman made and that are not denied on this record, and further concludes:

Maj. op. pp. ___ - ___ of 201 U.S.App. D.C., pp. 1173-1174 of 627 F.2d.

This bland characterization of the opinions and attitudes expressed in public and private by Chairman Pertschuk completely fails to portray the "prejudgment" and bias that is indicated by his actual remarks and conduct. It nowhere expresses the predisposition that his remarks actually revealed and thus fails accurately to evaluate the Chairman's state of mind on children's TV advertising. And this is not all; the majority raises even further obstacles to disqualifying a Commissioner on the ground of actual bias by asserting:

Maj. op. p. ___ of 201 U.S.App.D.C., p. 1174 of 627 F.2d.

No mention is made of the necessity that the rulemaker be a fair decisionmaker as implicitly required by the statute. There is no support for this attempt to inject "political" fears as a factor to negate disqualification. Of course, some can find politics in most everything done by government, but there is no showing here that it would be an improper interference with the "political process" to apply the proper rule of disqualification, any more than it was when this court found Chairman Dixon of the Federal Trade Commission to be disqualified to participate in a particular FTC adjudicative matter. Cinderella Career and Finishing Schools, Inc. v. FTC, 138 U.S.App.D.C. 152, 425 F.2d 583 (D.C. Cir. 1970). While it may have been Congress' design to place Commissioners in the dual roles of policymaker and decisionmaker, it was also Congress' intent that parties to Magnuson-Moss Act rulemaking have their evidence considered fairly and impartially. Hence, in disqualifying a decisionmaker who cannot decide with the requisite degree of fairness and impartiality, we would protect the political process, rather than interfere with it.

In addition to understating the Chairman's remarks, the majority does not attempt to actually portray them, or to apply them in all their verbiage, against the standard for disqualification that the majority establishes. This needs to be done.

I begin such analysis with the definite opinions expressed by the Chairman. On TV's Today Show on October 31, 1977 he admitted that "the implicit indication of [his] personal opinions in these replies are [sic] self-evident." By this statement he recognized that it is the implicit indications of his personal opinions that should be evaluated. He next stated: "I have some serious doubt as to whether any television advertising should be directed at a 3 or 4 or 5 year old, a pre-schooler . . . we have never treated children as commercial objects in our society." This expresses a very firm opinion that, by its advertising, television was treating such children as "commercial objects" — presumably trigger words in his vocabulary.

Next, in response to the question whether he would like to see the Federal Trade Commission ban children's advertising altogether he replied "not necessarily. But we've not excluded the possibility of bans on certain advertising of certain products to children." In the next paragraph, in an apparent attempt to save the Commission from the taint of any bias that his personal statements indicate, he attempts to spread the responsibility by stating that there are 4 other Commissioners and consequently his views do not bind the others. However, a Commission is prohibited from acting with even one biased Commissioner. See American Cyanamid Company v. FTC, 363 F.2d 757, 767 (6th Cir. 1966); Berkshire Employees Association of Berkshire Knitting Mills v. NLRB, 121 F.2d 235, 239 (3rd Cir. 1941). Then the Chairman stated that the Commission has "not as a body yet approached the question of a remedy for the evils we see in children's advertising." So the Commission (we) had already determined that the advertising was "evil". Apparently the only issue was what remedy to apply.

Next, in his speech to the Action for Children's Television Research Conference at Boston on November 8, 1977, he referred to the "moral myopia of children's television advertising." (Emphasis added). He also stated that "advertisers seize on the child's trust and exploit it as a weakness for their gain." (Emphasis added). These remarks evidence definite conclusions, definite opinions and a biased slant. Later he stated: "using sophistication techniques like fantasy and animation, they [TV advertisers] manipulate children's attitudes". (Emphasis added). This also indicates a prejudgment of the purpose and intent of TV advertisers.

He then argued:

Can any reasonable person contend that such remarks do not indicate that he has prejudged TV Advertising and decided that it exploits children?

He next delves into the millions of family relationships and indicates that he has decided that Commission action is required because he finds:

He has already concluded that children under five in the United States are not sufficiently under parental control to prevent them from begin victimized by TV advertising. The foregoing remarks indicate that Chairman Pertschuk has already decided that children are being subject to "exploitation" by children's advertising. That may be so, and the evidence might prove it, but it is apparent that he so decided before any evidence was introduced.

Finally he asserts:

This indicates the Chairman has already formed an opinion that television advertising is interfering with the relationship between parents and their children that only intervention by the Federal Trade Commission can correct.

Also, his recounting that he has talked about the "unfairness of advertising aimed at children" indicates he has concluded that such advertising is "unfair". With such conclusion already reached the only problem is how to prove it and what to do about it. He thus indicated he is not seeking to find what the evidence proves but what evidence can be found to prove his prejudgment. Whether it is "unfair" or not is the precise issue that was supposed to be the subject of the hearings.

In addition, he stated that "only a ban on the advertising of these products on programs directed towards the young child can remedy their inherent defect, although we must explore all remedial approaches to the problem." (Emphasis added). In other words, he has concluded that children's advertising has "inherent defect[s]", which he does not identify, "that only a ban" can correct the situation, and that he would explore other approaches.

In his final statement to the Conference he stated:

The majority opinion refers to the statement that "we must be rigorous and openminded in our analysis of both law and fact" as an indication of the fairness of the speaker. However, in the context in which this speech was delivered, these remarks appear much more as an admonition that the Commissioners must steel themselves against those who would "permit the treatment of children as commercial objects [and stop the Commission (we) from] hear[ing] . . . the parents, the teachers, the pediatricians, the dentists [etc. and those others who are advocating what he terms to be] the children's best interest".

Finally he postulates the problem as being to determine the "extent to which [the Commission is] to permit the treatment by television of children as commercial objects."

In a 1978 Newsweek article the Chairman is quoted as follows:

This statement is not denied. That he is "committed to taking action" cannot be construed as indicating that he is merely going to urge fellow Commissioners to hold hearings but rather that he has already concluded that "a major, serious problem" exists and the only remaining problem is to decide what the Commission should do about it. This supports what he has said before, that practically his sole concern is what action the Commission should take.

Finally we come to several letters written by the Chairman. Their full contents should be noted:

On November 17, 1977 he wrote the Honorable Donald Kennedy as follows:

These letters indicate that by November 17, 1977, the Chairman had a "conviction" that there are "evils flowing from the unfairness of children's advertising . . ." and he had been vigorously marshalling sentiment throughout the nation for a "fundamental assault on television advertising directed toward young children." Letter of November 9, 1977 to Colman McCarthy. So by that date he was already convinced that children's advertising was evil and unfair. He then advocates the legal theory for authorizing the Commission to take such action as he might advocate. His final paragraph is likewise strong evidence of the extent of his prejudgment.

In his letter of November 9, 1977 to Charlie Ferris he said that "after shooting my mouth off for three months here's our effort at putting some legal underpinings [sic] under our initiatives on children's advertising". He has already concluded, as his letter to Colman McCarthy indicates, that society in an "evil" manner, possibly attributable to "moral myopia", has permitted children to be made commercial objects.

Thus, if the Notice of Rulemaking were truthful, so far as Chairman Pertschuk's views were concerned, it would have stated in substance:

VI. AGENCY RULEMAKING AND CONGRESSIONAL LEGISLATION — COMMISSIONERS AND CONGRESSMEN.

Notwithstanding that the majority opinion holds that a "fair decisionmaker" is to be guaranteed for this rulemaking, the opinion seeks to obviate such guarantee, if I read the opinion correctly, by holding that Commissioners in their Magnuson-Moss rulemaking are to be considered the same as Congressmen, and the fairness with which they approach their rulemaking cannot be attacked because Congressmen are not subject to similar constraints in enacting legislation.

To reach such result the majority opinion compares Section 18 unfair and deceptive practice rulemaking by the Federal Trade Commission to the enactment of legislation by Congress and likens the appointed Commissioners of the Federal Trade Commission to the Senators and Representatives elected to Congress. It points out that courts have not imposed procedural requirements on legislatures and that there is nothing to restrict Congressmen from prejudging factual and policy issues.8 The opinion also notes that legislators must have the ability to exchange views with constituents and suggest public policy dependent upon factual assumptions.

The majority opinion quotes the unprecedented views of Professor Glen O. Robinson, a former member of the Federal Communications Commission, as follows:

This appears to be the source of the court's opinion that converts what is only a suggestion of Professor Robinson into a decision holding that the Commissioners of the Federal Trade Commission have the same authority as members of Congress. What an extreme ruling. Professor Robinson was honest when he admitted that this proposal "would create an entirely new frame of reference for assessing agency performance" but his article can be searched throughout without finding any suggestion that a court in one of its decisions could convert Federal Trade Commissioners into the equivalent of Congressmen. Professor Robinson's proposition could only be implemented by Congressional action, since agencies are purely creatures of congress.

It is true that legislators are not required to make findings of fact to support their legislation and that they cannot be disqualified by any court for bias, but there are other safeguards in the legislative process that compensate for the absence of such safeguards as are expressly imposed or implicit in the administrative process. First of all, legislators are elected by the voters of their district, and those in the House are elected for a relatively short term — only two years. They can be turned out very quickly if any bias they disclose offends their constituents. Secondly, there is a protection in the sheer size of Congress — 535 members of the House and Senate — that implicitly diffuses bias and guarantees that impermissible bias of individual members will not control. There is safety in numbers and a biased Congressman soon loses influence among the other members, if he ever acquired any. Also, the two house system and the Presidential veto are tremendous guarantees that legislation will not be the result of individual bias or even the impermissible bias of one house.9

Because these legislative safeguards were not applicable to Federal Trade Commissioners, Congress saw fit to impose other safeguards, i. e., (1) confirmation by the Senate, (2) limited terms for FTC Commissioners, (3) public notice and mandatory public hearings when proposing legislative type rules, (4) cross-examination, rebuttal, a public written record, a statement of reasons and purpose, and (5) a requirement that whatever rule is promulgated be supported by substantial evidence on the record as a whole, and (6) be subject to judicial review and other safeguards previously noted.

Congress considered these safeguards to be necessary to provide the same degree of protection that exists in Congress with respect to its exercise of legislative power. So the answer to that portion of the court's opinion that makes Congressmen out of FTC Commissioners, as I interpret it, is that the majority opinion elsewhere in citing Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978), recognizes that such a fundamental change in agency procedure cannot be made by the courts. We cannot make Congressmen out of Commissioners any more than we could by our decision make errand boys for the court out of the members of the Nuclear Regulatory Commission. Courts cannot reduce or circumscribe statutory agency power and by the same token they cannot grant powers that only Congress can give. Courts have no power to supplant the Senate, House and President by creating a legislative body of five members whose acts would not be subject to judicial review except to the same extent as Congressional statutes. Such a body would actually be a five man Federal Trade Congress.

VII. FAIRNESS AND DISQUALIFICATION.

The majority refers to the act of Congress that authorizes the Commission to prosecute unfair and deceptive acts and practices by rulemaking and contends that due process does not require more procedures than Congress has provided. Vermont Yankee Nuclear Power Corp., supra, 435 U.S. at 524, n. 1, 98 S.Ct. 1197. However, a fair rulemaker is not a "procedure"; it is an implicit requirement that flows from any situation that calls for a result to be reached on evidence.

The opinion then jumps to assert that since

I have no disagreement with the statement in the last sentence. My disagreement extends only to the conclusion the majority eventually reaches, i. e., that their result "is consistent with the situation and purposes of section 18." On this point I concur with Professor Scalia that the statutory intent evident in Section 18 requires Magnuson-Moss rulemakers to be without disqualifying bias or prejudgment.

The next assertion, by the author of the Cinderella opinion, is that we never intended the Cinderella rule to apply to a rulemaking procedure such as the one under review." (Emphasis added). So far as the other judges of the division of the Court that decided the Cinderella case are concerned, I believe this is an overstatement. We never expressed any opinion as to the application of our ruling in Cinderella to a Magnuson-Moss rulemaking proceeding. That issue was not involved in the case. We never concluded that the same principle did, or did not, apply to such proceedings. We applied the rule to disqualify the Chairman in Cinderella, a case involving an adjudication, because the parties had a right to a fair decisionmaker. Since, as the majority admits, a fair decisionmaker also is required here in the promulgation of substantive rules establishing specific unfair and deceptive acts and practices, no reason exists why the same rule should not be applied to this case in order to assure fair decisionmakers. How else could fair decisionmakers be obtained?

I would not restrict members of a regulatory commission in their public discussion of policy issues, and there is nothing in the requirement that rules should be promulgated after fair hearings by unbiased Commissioners that would prohibit administrators from discussing "the wisdom of various regulatory positions." The office of the Commissioner contemplates some such activity but that does not justify their overstepping ordinary bounds of reasonableness to become loud advocates and spend three months haranguing the public with their prejudgment on basic factual issues that they must eventually decide. Reasonable public discussion should not be restricted and our history indicates that requiring fairness in our decisionmakers has not inhibited public discussion. Very few public officials serving as members of regulatory agencies have ever been charged with over-stepping reasonable bounds. But when a decisionmaker, who must rise above partisanship, descends to vigorous and consistent advocacy over a substantial period of time and commits himself in the public mind, he jeopardizes his ability to make fair determinations and in extreme cases, such as we have here, he should be disqualified from subsequently posing as a fair decisionmaker on the subject of his advocacy.

At pages ___, ___ of 201 U.S.App.D.C., pp. 1170-1171 of 627 F.2d the majority opinion concludes:

421 U.S. 35, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975) (Emphasis added).

However, while the majority cites Withrow v. Larkin, 421 U.S. 35, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975), that case does not apply the "unalterably closed mind standard." Withrow involved a Wisconsin statute prohibiting various acts of professional misconduct by physicians. The act empowers the State Examining Board to warn and reprimand physicians, and thereafter to temporarily suspend licenses and institute civil action to revoke a license or initiate criminal action. Following its investigation, the Board notified a licensed physician that a closed investigation would be held to determine whether he had engaged in certain proscribed acts. At that juncture the doctor brought an action against the Board seeking injunctive relief against the hearing on the ground that in deciding to proceed against him the Board had prejudged his case and would therefore be disabled from hearing and deciding his case on the basis of evidence to be presented at the subsequently scheduled contested hearing. In determining the standard to be applied to the Board in such circumstances the Court remarked:

421 U.S. at 55, 95 S.Ct. at 1468 (Emphasis added). Withrow thus suggests a "fairness" standard; i. e., whether there is any ground for suspecting the Board of such unfairness that it could not hear and decide the case on the basis of the evidence to be presented at the contested hearing.10 If the 1948 decision in Federal Trade Commission v. Cement Institute, 333 U.S. 683, 68 S.Ct. 793, 92 L.Ed. 1010 (1948) is construed as establishing an irrevocably closed mind standard, the subsequent decision in Withrow must be recognized as modifying that rule.

The "unalterably closed mind" standard is also basically inconsistent with the holding that only fair decisionmakers may promulgate rules. Unfairness may exist in many instances where the Commissioner's mind is short of being "unalterably closed". The disqualification standard should be high, but not that high.

VIII. THE STANDARD FOR DISQUALIFICATION.

Because of the deficiencies pointed out above, I would reject the unalterably closed mind standard as imposing a practically impossible impediment in a great many cases to a showing of bias, even when the decisionmaker has in fact made up his mind in advance of the hearing.11 It is an unfair method of determining unfairness. Instead, I suggest that a superior standard can be gleaned from recent Supreme Court holdings, from a frank appraisal of the extent to which the Magnuson-Moss proceedings in this case require adjudicative determinations, and from considerations of fairness that must be said to be implicit in the structure of any statutory tribunal that is held out to the public as acting in accordance with the substantial evidence presented at public hearings.

The Supreme Court's decisions in Withrow v. Larkin, 421 U.S. 35, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975) and Hortonville Joint School District No. 1 v. Hortonville Ed. Ass'n, 426 U.S. 482, 96 S.Ct. 2308, 49 L.Ed.2d 1 (1976), each cited by the majority, hold that fairness is the ultimate measure of the qualification of an arbiter.

In Withrow, Justice White stated:

In Hortonville, Chief Justice Burger quoted from United States v. Morgan, 313 U.S. 409, 421, 61 S.Ct. 999, 85 L.Ed. 1429 (1941) in pointing out certain circumstances in which disqualification would be justified:

426 U.S. at 493, 96 S.Ct. at 2314 (Emphasis added).

That both of these cases involve consideration of disqualification of decisionmakers from adjudications does not deprive them of value in formulating a standard for disqualification from the Magnuson-Moss rulemaking that is involved here. As discussed supra, this Magnuson-Moss rulemaking contains many elements of adjudication — and in any event the majority admits that each of the decisionmakers must be fair. The fairness required stems not solely from constitutional due process considerations, but from the Congressional design of the statutory proceedings.

This design dictates concern not only for the FTC Chairman's duty to serve as policymaker as well as decisionmaker, a concern embraced by the majority, but also requires recognition of the rights of the public and those who appear before the Commission. It follows logically, then, that where the contestants of a proposed rule have the right to present evidence at a hearing on disputed issues of material fact, as in a Magnuson-Moss rulemaking proceeding, they necessarily have a correlative right to have their evidence heard by a decisionmaker who will give it fair and impartial consideration.

This is not to say that a Commissioner is necessarily to be disqualified if he (or she) has expressed opinions on policy matters that are later involved in Commission rulemaking. Rather, the moving party must show by a preponderance of the evidence that the decisionmaker could not participate fairly in the formulation of the rule because of substantial bias or prejudgment on any critical fact that must be resolved in such formulation. Such proof will be greatly aided where, as here, the decisionmaker's public statements repeatedly reveal fixed conclusions upon the primary issue that the agency proceeding contemplated would only be determined after the hearing. Such standard for disqualification accords with the underlying principles that were applied in Withrow and Hortonville, supra.

Chairman Pertschuk over a substantial period of time, on the very matter here presented, has made numerous appearances as a vigorous public advocate "committed" to curing the "evils" and "moral myopia" evident in the "exploitation" of children's advertising on TV. Even applying the majority's stiff test for disqualification, such conduct and expressions from his own mouth and pen, as near as words and conduct can, indicate an "irrevocably closed mind" and prejudgment of the ultimate fact involved — the "evil" of such advertising — and he should recuse himself; failing this the court should order his disqualification from participation in the proceedings. He has proved that he is not an impartial decisionmaker on this matter.

For the foregoing reasons I respectfully dissent against the result reached by the majority.